Cryptocurrency not a legal tender

In the biggest giveaway of Budget 2018, the Finance Minister Arun Jaitley cleared that cryptocurrency is not a legal tender and will discourage its use. There have been reports where banks have frozen the accounts of a few cryptocurrency exchanges in the country and the registrar of companies has stopped registering new companies intending to act as an exchange. Jaitley mentioned that the government plans to look into the utilization of blockchain technology.

There were talks that the government could come up with a roadmap in order to regulate the cryptocurrency market. Due to the increasing craze among investors to put their money into the market, the alarm bells set off in the government. The market is highly volatile. Jaitley had mentioned that the cryptocurrency will not be considered as a legal tender in the country even before the budget. There is a fear that operators could take advantage of the greed amongst investors to make short term gains and they could disappear after collecting the money. This could lead to another headache for the government. There are also fears that the underworld could use their black money to invest into cryptocurrency and register gains.

Cryptocurrency is gaining immense popularity recently. However, it is a highly volatile investment with price movements swinging wildly. South Korea has already banned anonymous trade in the currency and there are also issues on the safety of the investors’ accounts against hackers. There were instances where the accounts were hacked by criminals who fled with the investors’ wealth and currently there is no way to retrieve money from the hackers.